As the banking share has rallied about 40%, UBS now downgrades to ‘sell’.
Analyst John Napier, in a note, said: “the StanChart rally has happened against a ~60% fall in consensus profit forecasts for this year and 30% decline for next.”
He acknowledged that there are great businesses within the group - namely its transaction banking and financial markets units - but said that certain headwinds would combine with low yield curves and elevated loan losses to make life particularly difficult in the near term.
UBS forecasts a loss for Standard Chartered this year.
Deutsche Bank, meanwhile, retains a ‘hold’ rating for Standard Chartered but lifted its price target to 460p from 400p (current price: 554p).